This is a guide to New Dealing yourself, based on the recent experiences of a small group of three people. It took about two months to get to the stage where we could employ someone from our group, allowing that person to sign off. In return, our group, as the employer, received a subsidy of £50 a week from the jobcentre. After the cost of Employee Liability Insurance, the net amount of money coming into the group was about £45 a week - less than signing on, but with a six month life the scheme gives a break from signing on.
It has also opened the doors to other government schemes, which, with care, could offer a break from signing hassles, while keeping money for living and doing things coming in.
First the benefits and various conditions of getting into bed with New Deal for Employers. Then a description of what we had to do, if you want to have a go too.
You will need:
• At least one person who is signing on under New Deal 25 plus. (Also can
work for New Deal 18-24, but the subsidies and hoops to jump through are different.
Similar principles though)
• A different person to take on making contact with the job centre. This
includes dressing smart for a couple of suit meetings.
• A postal address
• Premises, which someone from the job centre can visit
• A bank account in your employer name eg: Friendly Garden Services"
(don't tell the bank you're an employer though, or they'll charge you business
rates. Just say it's for a voluntary group, which you are anyway. Nationwide
& Yorkshire Bank work OK)
• A phone number which won't get answered by someone who fucks it up
• Employer's Liability Insurance, although in theory this won't be asked
to be seen as you might only be asked to sign a form saying that you have it
• To be up for the paperwork involved. This guide should prepare you enough
to make an informed choice on whether you're up for it or not
First steps:
Are there a group of you already? If so, this makes life easier, as what you
are going to do is all legal and above board. Just decide what aspects of your
group's activities will be easiest to convey to the suits. Keep it simple. Don't
make up things that you don't have to.
Possible example
A group of friends, at least some of whom sign on, want a break from signing
on. As a group they already share the skills to carry out certain projects.
They might be into setting up squats, repairing vehicles, making websites, recycling
materials... whatever. They sit down one night and start thinking about what
aspects of their work together could be sold to someone as a job, although unpaid
at the moment. This is the basis of getting your six month signing holiday.
What you can earn
* £50 per week subsidy to the employer for employing someone a minimum
of 16 hours a week, up to 29 hours a week, for up to 26 weeks*
* Up to £300 to the New Dealer, soon to be employed, from their New Deal
advisor for clothing, safety wear, whatever you can blag as necessary for you
to be up for the new job
* Six months without signing on (not checked when you can sign back on)
*A subsidy of up to £75 per week is also possible if you are employed for over 30 hours a week. In our case we stuck to the lowest hours possible to keep paperwork to a minimum, and to avoid wage deductions as will be seen later
Next steps:
Work out who is going to be the "employer" - this person can be a
volunteer from your group. Decide as well who is going to be the new dealer
- who's being hassled the most?
From now on it helps if the work you already do fits with what you say you do as an employer. Some photos or examples of your work will help, or a premises that is obviously a place of work.
Time to become an employer. Have a group name ready that will also be your bank account name. Ring the Inland Revenue's New Employers Helpline on 0845 60 70 143 and say you are a small voluntary group that is looking to employ one person, and you'd like to register as an employer. They will ask you for: Employer name Contact persons name Address Phone number
Inland Revenue will send you in the post..
• A new employer's pack, with all the necessary forms and information you
will need for nearly all of this work
• A separate letter from your local tax office, with their contact details,
and two reference numbers. One is the PAYE (pay as you earn) number, the other
is to identify you in correspondence with the local tax office.
• Another separate mailing which will have a year's worth of paying in
slips for National Insurance and tax deductions, and a set of pre-paid addressed
envelopes. You will pay no tax or national insurance on 16 hours a week, so
these just get posted to the Inland Revenue once a month with zeros in all the
boxes. More of that later..
You're an employer! Get a bank account sorted. Use letterheads, letters sent to your group name, etc to get a Treasurer's account Don't use your Inland Revenue paperwork as ID because that identifies you as an employer and you might get a business account instead - bank charges for everything!
There are now two options of where to go
a) The employer in your group now contacts your nearest jobcentre. Say you are
a new employer looking to employ someone through New Deal. Explain that you
are a small voluntary group who is interested in employing someone through New
Deal as you feel it would be better for the long term development of your group
and its work to have a coordinator, looking after money and all that. Something
office based (keeps down insurance costs later). The office can be in a home,
by the way. Say you're going to recruit soon, and make sure your New Dealer
gets to hear about it and tells their New Deal Advisor they've got an interview.
If it isn't automatically offered, your New Dealer should ask about subsidies
that can be offered by New Deal to a potential employer. Your New Dealer comes
to your employer fbr a job interview...
b) Your New Dealer has already been offered a New Deal for Employers subsidy card, so your employer person can contact the nearest jobcentre and say you are a new employer looking to employ someone thrDugh New Deal. Say that you are a small voluntary group who is in the process of recruiting for a coordinator post, blah, blah as above, and one of your interview candidates turned up with a card from New Deal saying 1f you employ this person you could get up to £1950 subsidy"~ For this option the New Dealer has to have already been offered this card by their new deal advisor. Ask what the deal is for employers, sound interested, off you go. Alright, you've started. Well done so far.
The local Jobcentre contact made by your employer (possibly the same Jobcentre
as your new dealer) will want to make a visit at some point. For this you will
need:
• A Health and Safety at work poster - photocopy the one at your local
library, or you could pay £10 for one from the Health and Safety Executive.
Make sure you replace the names of the health and safety representatives!
• An employment contract for your new employee - a list of roles and
responsibilities. There is a guide to writing one (see Resources section at
the
end)
A copy of your Employer's Liability Insurance, or a copy...
A fire certificate - if you employ less than 10 people on any floor of the
premises, the fire brigade won't issue a fire certificate. Get the local Fire
Safety office number and a name though - just to convince the Jobcentre
type that you're right! You don't need more visitors than necessary anyway.
To be smart
The premises to be tidy, some together-looking paperwork lying about, an accident book or first aid kit visible
Getting serious, keeping it together
You're an employer. You are, in the Jobcentre's eyes, a 9~ person. You knock
claimants off their list. You're a new business. Sniff about for other support
on offer. This varies from area to area. And depends how much of all this bullshit
you want to involve yourself in. You're not doing anything wrong or out of order,
after all.
Work out what you want to tell them beforehand, and what you don't want to mention. Keep it simple. Don't let yourself be rushed. Yes, you do have a health and safety policy. Yes, you do place great importance in training within your organisation. Etc.
You will be asked to sign a New Deal Employer's Agreement which the Jobcentre person your employer is in contact with will countersign. There is also a questionnaire, asking yes/no questions about whether you have insurance, health and safety policy, offer supervision and things like that. This is the level of examination. You can pass it with a bit of preparation.
Once the Employer's Agreement is signed, your employer's contact at the Jobcentre will contact your New Dealer's advisor, and the advisor is the one who will sort out the subsidy payments. They will contact you for bank account details and maybe a bit of a chat about employment prospects after the first six months, are you interested in taking on anyone else, etc. Humour them, it's nearly game on.
And the money starts coming in.
Other necessary work
You will need to keep paperwork to cover yourself, and sent payment slips to
the Inland Revenue. You can contact your local IR office, remember they posted
you their details after ringing the New Employer's helpline? Ask for the Business
Support Team - they'll take you through all the paperwork personally, or you
can go to a free session with a group of other new employers.
The paperwork itself is fairly basic, but ring them if you get stuck. They're used to people not having a clue what the hell is going on with the forms.
The figures:
Alright now, you've employed someone at 16 hours a week on the minimum wage
of £4.10 per hour.
16 x £4. 10 = £65.60 per week
Under Inland Revenue rules, if you are paying someone less than £89 per week there are NO tax deductions or national insurance deductions to be made. What you see is what you get. Keep it simple. However, you have to let the inland Revenue know what you're doing - you rang them up and introduced yourself remember!
Inland Revenue Paperwork:
• Payslip booklet - fill in zeros in all boxes and return in the pre-paid
envelope PICTURE
• Deductions working sheet P1 1 - this is where help from the local tax
offices Business Support Team is good. 'This form records earnings, deductions
(zero) and cumulative earnings. I won't attempt to explain it here, but once
cracked its ok. ICs important to have a tax code for your new employee to not
pay emergency tax (any tax!). The Business Support Team will help you avoid
paying tax, legally.
• There will also be an annual return to the Inland Revenue. This is where
having a dedicated bank account is crucial, and you must actually take out the
£65.60 you pay your employee. That has to happen, but you can pay in cash,
weekly or monthly, so work out whats most useful and easiest for you. This keeps
you all above board.
Other paperwork:
• Wage slips, and a signature from your employee for each wage packet received
(see Resources)
• Knocking up an employee handbook might help in case of any future visit,
with health and safety information, a handout from your induction session, etic
Resources:
DTI publications order line, tel: 0870 1502 500 will provide the following free
of charge (the codes will be asked for):
• Written statement of employment particulars (PL700) and Example form
of a written statement of employment particulars (PL7OOA). This will help you
write and employment contract
• Pay statements, what they must itemise (P1-704). Tells you what needs
to be in a wage slip
You can also get other booklets off them. Some might be useful for getting
your head round things, such as:
• Contracts of employment (P1-810)
• Individual rights of employees (P1716)
National Minimum Wage hotline 0845 6000 678 for Guides to the National Minimum Wage. If your maths is up to it~ there are various tax deductible expenses that can be explored if you want to try for the higher new deal subsidy.
Good luck! ;-)
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